You might be interested in this review of 99designs from a designer's perspective. I tend to agree with his comments. However, there also seems to be a market and if all parties are aware of how choosing a service like 99designs (as described in the review) will impact their final product, then I would say "Go for it".
FYI, strong language in this review.
http://www.graphicpush.com/99designs-bullshit-20